AeroVironment-Kratos relationship is trained on 'a real opportunity'

By Marjorie Censer / May 9, 2019 at 9:57 AM

The AeroVironment-Kratos Defense & Security Systems strategic relationship announced this week is focused on a particular customer and a "real opportunity," according to Kratos' chief executive.

The companies said this week they have a new relationship focused on developing and demonstrating "highly integrated and operationally effective multi-domain unmanned system solutions for near-peer, denied environments."

In a call with analysts Wednesday evening, Eric DeMarco said the two companies have "talked for quite a while about the right opportunity to team and go after something."

"We're not teaming just to team and put out a press release," he said. "We have a customer, and we have a real opportunity here."

DeMarco said the two companies are both commercially minded and ready to move rapidly.

"We're going to do something because the customer has indicated interest, and we're going to deliver this quickly," he said. "It's not going to be five years, [like] if you did it with a government contract."

He said DOD wants "more of a commercial-based model."

"Reduces risk, reduces schedule, reduces cost," DeMarco added. "Hopefully, the next 12 months, we're going to be able to demonstrate something that we talked about in the press release."

Meanwhile, Kratos said this week sales in its most recent quarter reached $160 million, up 12% from the same three-month period a year earlier.

The company's quarterly profit hit $3.1 million, up from a $2.2 million loss a year earlier.